Stock market returns and strategies for new investors

Historical data regarding the US stock market suggests that the common belief of a consistent 10 percent annual return is a simplification. Between January 1871 and September 2026, US stocks yielded an average annual total return of approximately 9.4 percent, including reinvested dividends. However, annual returns are highly volatile, ranging from losses of 44 percent to gains of 57 percent. In more than 25 percent of the years studied, US stocks ended with a loss, and only 8 percent of years saw returns between 8 and 12 percent.

For those beginning to invest, experts recommend comparing providers, checking for proper licenses and supervision, and considering costs. Options include managed investing, where funds are allocated based on personal goals and risk tolerance, or independent investing. Diversification is emphasized to mitigate risk by spreading capital across various investments rather than single companies. Automating monthly contributions can also simplify the process. Investors are advised to use funds they do not need immediately to withstand market fluctuations without panic.